US charges two former UBS traders

The United States has charged two former UBS traders with conspiracy over their alleged roles in the Libor manipulation scandal, Attorney General Eric Holder said Wednesday.

"By causing UBS and other financial institutions to spread false and misleading information about Libor, these alleged conspirators -- and others at UBS -- manipulated the benchmark interest rate upon which many consumer financial products -- including credit cards, student loans, and mortgages -- are frequently based," Holder said.

"They defrauded the company's counterparties of millions of dollars. And they did so primarily to reap increased profits, and secure bigger bonuses, for themselves."

The implicated individuals were identified as Tom Alexander William Hayes, a 33-year-old Briton and 41-year-old Roger Darin of Switzerland.

Hayes has also been charged with wire fraud and an antitrust violation, Assistant Attorney General Lanny Breuer said.

"There was nothing subtle about these traders' alleged conduct," he said.

Holder said the Justice Department was also filing a criminal information charging UBS Securities Japan -- a subsidiary of UBS -- with felony wire fraud.

"The company has agreed to plead guilty to this charge, to admit to its criminal conduct, and to pay a $100 million fine," he said.

UBS AG, Holder added, has agreed to pay a penalty of $400 million to the US government, as well as to accept responsibility for its misconduct and to continue cooperating with the probe "as part of a non-prosecution agreement."

"Combined with roughly $1 billion in regulatory penalties and disgorgement, these criminal fines and penalties bring today's total resolution to approximately $1.5 billion," Holder said.

Regulators slapped $1.5 billion in fines on Swiss banking giant UBS earlier Wednesday, the second-largest amount ever, for rigging the key global Libor interest rate in a deepening scandal threatening more than a dozen other banks.

The investigations by Swiss, British and US regulators revealed evidence of massive misconduct in the setting of the Libor rate, a global benchmark affecting products from student loans to mortgages.

The Libor rate is a reference point for vast ranges of financial contracts around the world worth about $300 trillion, and revelations that it had been rigged have damaged the reputation of the City of London financial center.